DEVELOPING A SUCCESSFUL
ESTATE PLAN
Five key elements to protect your family and your legacy
KEY TAKEAWAYS
A successful estate plan should be comprehensive.
It should be developed with expert assistance.

A complete estate plan encompasses a revocable
living trust, a will, a durable power of attorney for both
financial affairs and medical decisions, and a
living will for end-of-life decisions.

You have worked long and hard to build your estate. Avoid
the mistakes that could leave your wealth unprotected.

Review estate plans regularly – at least once a year –
and identify any life changes that will impact your plan.
DEVELOPING A SUCCESSFUL ESTATE PLAN
INTRODUCTION
Estate planning means much more than simply drawing up a will. It means
establishing an integrated plan designed to safeguard your estate, future
generations and those you love. It also means knowing your assets will be
properly managed and your legacy preserved.
An effective estate plan should be comprehensive, so it’s important to consider
your overall financial objectives and develop your plan with expert assistance.
These experts, at a minimum, would consist of an estate planning attorney and a
financial advisor and may also involve others such as your CPA or an appraiser.
Most important, don’t put off estate planning. It is never too early to start a plan
that is designed to preserve, protect and transfer wealth to those individuals and
organizations you care about most.
The following pages provide more insight into estate planning strategies and
how to help ensure that you create and maintain a successful plan.
An effective estate plan should be comprehensive, so it’s
important to consider your overall financial objectives and
develop your plan with expert assistance.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
CREATING AND MAINTAINING A SUCCESSFUL ESTATE PLAN
You have worked long and hard to build your estate. To ensure that your wishes
will be carried out, your wealth protected and your legacy preserved, there are
five key elements to a successful estate plan, including:
STEP
1
Take the first step: Commit to creating
an estate plan
Complete all components
of your estate plan.
STEP
3
5
2
Appoint an appropriate fiduciary
to oversee your plan.
Update your plan regularly, especially
when life, taxes and other events change.
STEP
STEP
STEP
4
Communicate the plan with
appropriate parties.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
STEP
1
TAKE THE FIRST STEP
While estate planning can be an uncomfortable topic, not having a plan in
place can leave your family and your legacy in an even more difficult situation.
Surprisingly, many intelligent, wealthy and otherwise well-advised individuals
put estate planning off or simply ignore it to their detriment. It is never too early
to begin planning because there are plenty of potential life events – untimely
death, accident, dementia or injury – that could leave your loved ones confused
and worried about what to do because there was no plan in place.
Without your own plan, you may not realize it, but the government has an estate
plan already prepared for you. The process is called intestate succession. In
addition to it being expensive, public and cumbersome, this process may ignore
important needs, such as designating a proper guardian for your minor children
who you may have not chosen yourself.
It is never too early to begin planning because there are plenty of potential
life events – untimely death, accident, dementia or injury – that could leave
your loved ones confused and worried about what to do because there was
no plan in place.
STEP
2
COMPLETE THE PLAN
Often, individuals think of estate planning as simply signing a will. It takes more
than that, particularly in today’s more complex tax and legal environment. Here
are some essential items needed to complete a comprehensive estate plan:
u
A will
u
A revocable living trust
u
A durable power of attorney for financial affairs
u
A durable power of attorney for medical decisions
u
A living will for end-of-life decisions
While not the all-encompassing form many people believe it is, a will is a
necessary part of every estate plan as it documents in detail the method in which
you want your assets transferred upon your death.
A revocable living trust, or living trust, is an agreement that provides various
benefits, including the efficient management of one’s financial affairs in the event
of incapacity of the living grantor (the person who created the trust). Upon the
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DEVELOPING A SUCCESSFUL ESTATE PLAN
grantor’s death, a living trust can be used to transfer assets
to loved ones or favorite charities efficiently and outside of
the probate process.
Creating a durable power of attorney for both your financial
and medical affairs is extremely important. In the event of
incapacitation, the durable power of attorney allows your
“attorney in fact” to transact business on your behalf or
make medical decisions when you cannot. In choosing your
attorney in fact, make sure it is someone you trust to carry
out your wishes, someone who will not take advantage of you
when you are incapacitated, and someone who is willing to
serve as your agent.
A living will is a tool that allows you to make end-of-life
decisions for yourself in the event you are ever unable to
express your wishes. A living will contains your instructions
to your physician and other healthcare providers as to
the circumstances under which you want life-sustaining
treatment provided, withheld or withdrawn.
ASSET TITLING AND BENEFICIARY DESIGNATIONS
The manner in which assets are owned – including joint
titled property, community property and life insurance – is
very important. For example, if a married couple creates a
new estate plan but all property remains joint titled with
right of survivorship (JTWROS), the surviving spouse
automatically owns all property held as JTWROS no matter
what the terms of the will or trust are. More time and money
will be needed in order to correct the new estate plan.
A LESSON LEARNED
Here is a real-life situation that demonstrates the disastrous impact of not
completing an estate plan. A gentleman
met with his attorney, and together, they
prepared the appropriate documents for
his estate plan, including a will and living
trust. As time passed, the gentleman was
slowly stricken with Alzheimer’s. When he
reached a point of incapacitation and the
family stepped in, they were surprised to
find that the documents had never been
signed. Without the appropriate signatures, the documents were not valid.
There was no trust or power of attorney
in place to dictate the man’s wishes, and
as a result, a guardianship was required
to manage both his personal and financial
affairs. The family is now required to go
through the court to manage his finances,
a cumbersome and expensive process, and
his wishes for the final distribution of his
assets will not occur.
Also, consider asset ownership when moving between
community property states (like Texas or California)
and common law property states (like Florida, New York
or Illinois). Community property is a form of shared
ownership of property between husbands and wives that is
recognized in only nine states. Moving between common
law and community property states without considering
the implications of the move can result in unintended and
unfortunate estate planning implications.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
The ownership of life insurance policies can also have
estate planning implications. If the owner of the policy is
also the insured, the death benefit of the policy is included
in the insured/owner’s gross estate for federal estate tax
purposes. Owning policies of insurance on your own life
can create unnecessary estate tax consequences. It may
be advantageous to transfer life insurance policies to the
beneficiaries of those policies or to an irrevocable trust.
Talking with a financial advisor in conjunction
with a tax planning attorney and CPA will help
create the best strategy for you to address all
of these areas and more.
STEP
3
APPOINT APPROPRIATE FIDUCIARIES
The person or trust company who acts for you when you
can’t perform under your will (a personal representative
or executor) or trust (a trustee) is called a fiduciary. Often
estate planners believe that the fiduciary responsibility
should be given to a specific individual as an honor or to
the oldest child out of respect. Yet, thoughtfully selecting
your fiduciary is critical to an effective estate plan.
Ideally, the wisest choice for a fiduciary is one that
has the right combination of time, temperament
and tenure to carry out the role.
When identifying a fiduciary, consider the time
required to carry out the responsibility, in terms of having
both enough time to conduct and live their own lives as
well as serve as your fiduciary and the ability to act as the
trustee during the trust’s entire term. Selecting an adult
child with a busy life consumed by family, work and travel
may not be in the best interests of your estate because
they will have very little time to serve as your fiduciary.
Nor would it be advisable to name an older friend or
relative as trustee since your beneficiaries are likely to
outlive them. The traditional rule is that trusts must end
21 years after the death of the youngest beneficiary, but
many trusts can last much longer and impact numerous
future generations. The key to remember is that no one
will live forever to carry out your wishes in the trust.
Consider
Raymond James
If your assets and plans are
complex, administering your
trust may take a significant
amount of time, knowledge,
energy
and
commitment.
Choosing the right trustee – or
team of co-trustees – to protect
and administer the assets you
have worked a lifetime to accumulate is crucial to your future.
Raymond James Trust offers
complete personal trust services, including serving as
trustee or as an agent or
custodian for individual trustees. Services by Raymond
James Trust are delivered in a
team context, drawing upon
the knowledge and experience
of financial advisors, affiliated
investment management entities and experienced trust staff.
Solutions are never “one size
fits all,” but are individually tailored to fit personal needs.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
In selecting a fiduciary, you should also think about that
person’s temperament. Families often conflict with a fiduciary
due to mismatched temperaments. An effective fiduciary
must be diligent and detail-oriented. Select an individual
who tackles any problem or task with the same work ethic
as you. An effective fiduciary must also be objective and
honest. That is imperative when dealing with such important
decisions that affect your loved ones’ financial future and
your legacy.
Finally, your choice for fiduciary should possess the tenure –
a combination of experience and talent – for the role. Acting
as a fiduciary is a difficult job and a heavy responsibility.
Without this proper blend of talent and experience, the
fiduciary may need to hire additional expert talent not initially
planned for, ultimately costing the estate more money.
Worse, if the fiduciary tries to go it alone, not admitting he or
she doesn’t know how to handle a certain issue could lead to
even more costly mistakes that may result in additional court
and tax fees.
Given both the subjective and objective elements to consider
in choosing a fiduciary – from talent and temperament to time
and longevity – the best choice may lie with an independent
corporate trustee like Raymond James Trust, which is highly
skilled at dealing with the intricacies of estate tax, trust and
investment strategies. Naming a reputable trust company
as the fiduciary simplifies technical issues, eliminates the
emotional perils often involved with family or friends, and
ensures that your wishes will be fulfilled exactly as they are
spelled out in the trust. Just as important, an independent
trust company is closely regulated, audited and backed by
A FUTURE BUILT ON TRUST
John and Amanda had created a trust for
their children, naming John’s brother
Mark as the trustee. Although Mark was
a capable administrator of the trust, John
and Amanda had an increasingly difficult
time managing the assets in the trust
separate from their investment accounts.
When Mark moved to another state, it only
made things that much more difficult.
At the suggestion of their financial
advisor, the couple transferred their
trust account to Raymond James Trust.
The transition was quick and easy, and
now John and Amanda have a corporate
trustee with a team of trust professionals
continuously overseeing and reviewing
their trust account as part of
their overall financial plan. And
now when John and Amanda visit
Mark and his wife, they talk about
everything but their financial future.
the capital requirements set by its regulators.
Ideally, the wisest choice for a fiduciary is one that has
the right combination of time, temperament and tenure to
carry out the role.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
STEP
4
UPDATE PLAN REGULARLY
Like any financial plan, an estate plan is based on the best available information
within the time frame the plan was developed. But once an estate plan is created,
the work is not over. Life is like a motion picture with dozens of frames changing
every second – sometimes subtly, sometimes dramatically. Your estate plan is
only reflective of a single frame or a single point in time. Review estate plans
regularly – at least once a year – and identify any changes that will impact your
plan, including family, personal interests, wealth and changes in tax law.
With respect to family, have any of the following occurred in the past year?
• You had more children
• Grandchildren were born
• You divorced or married
• A loved-one fell ill and developed special needs
These are all important factors that should be taken into consideration when
making adjustments to your estate plan. Some other life changes and questions
that may have profound effects may not be so obvious:
• Has your income grown or contracted?
•How much do you want to leave to your children versus giving to a charity
that has become important to you?
•How has the rising cost of education affected your plan?
•Is your wealth primarily held in a significant asset like a vacation home
or a particular stock?
•Do you want to transfer the home because it has been in the family for
three generations or sell it now and pass on only the value of the home
to a beneficiary?
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DEVELOPING A SUCCESSFUL ESTATE PLAN
TAXES AND EXEMPTIONS
A TAX-SAVING SUCCESS STORY
Changes in law and tax structures can quickly put an estate
plan out of date as well. As it stands now, Congress has
set the maximum estate tax rate at 40% and has increased
each person’s lifetime exemption amount to $5.43 million
(2015), which has been indexed for inflation. For spouses,
including same-sex couples married in the appropriate
states, that is $10.86 million. In addition, Congress has
included “portability,” which allows a deceased spouse’s
estate to elect to transfer any unused exemption amount to
the surviving spouse. But federal and state estate and gift
tax laws can change at any time, and we must keep an eye
on any upcoming changes to these rules, preferably with the
assistance of a tax planning attorney.
After 24 years in the medical field, Jack
retired and he began thinking about his
estate and his legacy. He wanted to do
more than just bequeath his possessions
in a will. So he planned in advance to
ensure that his estate, and his family’s
future, would be protected from losses,
especially through taxes.
One of the first principles of economics is that everything
is connected to other things in unseen ways. And every
action has a consequence. These are the reasons to review
your estate plan on a regular basis. You may not recognize a
change, but your expert advisors might.
Life is like a motion picture with dozens of frames
changing every second – sometimes subtly, sometimes
dramatically. Your estate plan is only reflective of a single
frame or a single point in time.
Working together with his financial
advisor, attorney and tax advisor over
the years, Jack crafted an estate plan
that placed high-value assets vulnerable
to income and capital gains taxes into a
trust for his family. So while those assets
continued to generate income for Jack’s
beneficiaries, they were no longer part of
his taxable estate. Jack also transferred
existing life insurance policies into
the trusts, naming family members as
beneficiaries, to provide the cash needed
to settle the estate taxes when it came
time to distribute the assets to them. With
his days in the ER now over, Jack knew
his new phase in life would begin with
everything he owned in its rightful place.
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DEVELOPING A SUCCESSFUL ESTATE PLAN
STEP
5
COMMUNICATE THE PLAN
Once your estate plan is created, you can breathe a sigh of relief for tackling a
tough topic. The next important step is to communicate critical plan information
to those you have charged with carrying out your plan – your fiduciaries.
Your selected fiduciary should know they have been named and have the
documents or have a way to gain access to those documents. Your selected
fiduciary should know the names and contact information for your estate
planning attorney, financial advisor, CPA and other key players in your estate
plan, including physicians. Last, be sure the selected fiduciary knows where to
find the contact information for the loved ones or charitable organizations you
include in your estate plan.
CONCLUSION
You have worked long and hard to build your estate. An estate plan done with
careful attention to detail, the collaborative expertise of professionals and
regular review can provide a great deal of comfort to you, and to those you love.
Ensure that your wishes will be carried out, your wealth protected and your
legacy preserved by addressing the five key elements of a successful estate plan.
And the sooner you address them the better. With a proper estate plan, you can
ensure that your assets will be applied to the objectives you choose, both now
and in the future.
GET STARTED BY WORKING WITH THE EXPERTS
There are certainly a number of factors and strategies to consider in
protecting your wealth and legacy for the future of your family. A partner
like Raymond James Trust can help your financial advisor get started on
your plan or review an existing estate plan to see where improvements can
be made to ensure a successful transition of wealth. Don’t keep your wishes
from being carried out and leave your wealth and legacy unprotected.
Please note: Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond
James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the
appropriate professional.
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